Railways, DoT on collision course over 700 MHz spectrum

Officials in the DoT told FE that state-owned telecom operator BSNL has also been asking for 700 MHz spectrum but is offering equity in return for the airwaves.

The railways want 10 MHz spectrum for their internal communications but the DoT feels that it won’t be prudent to give the same for free as it is worth Rs 65,680 crore (according to Trai’s recommended reserve price).

The department of telecommunications and railways are on a collision course over reservation of 10 MHz, premium 4G spectrum in the 700 MHz band, for the latter.The railways want 10 MHz spectrum for their internal communications but the DoT feels that it won’t be prudent to give the same for free as it is worth Rs 65,680 crore (according to Trai’s recommended reserve price). DoT is also citing the Supreme Court ruling of 2012 which mandates that natural resources should be allocated only through auctions.

However, sources said that the finance ministry has given a green signal to the proposal as it is not for commercial purposes. The railways want to use the spectrum for their internal communications and enhancing the security in trains. The airwaves would be utilised for live feed of CCTVs, communications between officials and tracking the trains in real time. “The spectrum will be utilised only for internal communications and no commercial use will be undertaken,” sources said.In this regard, a draft Cabinet note was also prepared by the railways a few months ago.

Officials in the DoT told FE that state-owned telecom operator BSNL has also been asking for 700 MHz spectrum but is offering equity in return for the airwaves. Earlier also, when 3G spectrum was allotted to both BSNL and MTNL without them participating in auctions, the companies had to match the highest bid.“There is around 35 MHz spectrum available across country in the 700 MHz band and if 10 MHz is allotted to railways for free, it would accrue loss to the exchequer,” an official in DoT said. The official, though, added if the Cabinet approves allotment of such spectrum to railways, DoT will have to give it. The telecom industry also doesn’t seem enthused with the idea of any further fragmentation of the 700 MHz spectrum by providing it to the railways, even though it is not for commercial purposes.

“The characteristics of the 700 MHz band are such that it is useful for providing extended coverage areas where deployed, particularly for rural areas. The total spectrum available in this band for access services such as mobile broadband is 90 MHz of which the DoT has already earmarked 20MHz for allocation for use by defence. From the balance should any more spectrum be given for any other government agencies such as railways or PSUs, the balance will be a meagre 30 MHz. It is also to be understood that the Railways coverage will only be restricted to along railway tracks or in their establishments, whereas this band is particularly useful for larger distances in rural areas well beyond railway network coverage areas. Allotting any part of this band only for railways will lead to fragmentation of this band as also create interference issues. We believe that auctions should be the mandated means to acquire access spectrum to be used for commercial purposes. Due diligence must be exercised to prevent any fragmentation of this valuable band which will make it near useless for use for provision of mobile broadband services using 4G or 5G services to be provided to a larger cross section of the population, as envisaged in the NDCP 2018,” Rajan S Mathews, DG, Cellular Operators Association of India, said.Telecom analyst Mahesh Uppal said that while it is fine to provide the spectrum to railways as it is not for commercial purposes, a transparent process should be adopted by the government.

“It is okay if the railways is seeking the spectrum for internal communications and not commercial use. It makes perfect sense to give railways the access to this spectrum for enhancing productivity or safety. After all, they are probably India’s most inclusive infrastructure,” Uppal said. “I believe that the Supreme Court judgment essentially bars the government from giving a precious natural resource like spectrum to commercial entities without a transparent process,” he added.